Photograph by Jonathan Maze
It’s official: restaurant sales fell off a cliff last month.
According to federal retail sales data released this week, sales in food services and drinking places were down 23% in March and 26.5% from their February level as states began to close dining rooms and operators who have closed their doors.
The industry hasn’t had such low sales for over five years.
Much like the federal unemployment data did earlier this month, the numbers probably underestimate how bad it was.
Most of that decline in sales came in the past two weeks, after states began enforcing stay-at-home orders forcing restaurants to phase out food service.
Those first two weeks of the coronavirus shutdown have been passed with much of the country huddling in and eating the food they bought, emptying grocery stores across the country.
In contrast, for example, grocery sales last month increased by more than 29%.
Figures suggest the industry likely lost half of its sales in the second half of the month as operators shut down and put workers on leave. Millions of restaurant workers have probably lost their jobs.
The decline is more than rare. While major storms and weather events can derail restaurant sales in some areas, in general, they are perpetually increasing nationwide.
Catering company Sister company Technomic said this week that it believes industry sales this year will decline between 14% and 24%, depending on the severity of the recession and the depth of the recession. In contrast, the worst year on record was 2009, when sales fell 1.2%.
The good news, in general, is that sales have bottomed out and started to rebound in currently open locations. Indeed, there is ample evidence to suggest that the stimulus is causing consumers to buy take-out more often, as several operators say they have seen increased sales in recent days.
Yet, as we knew from the operators’ doors closing or the loss of most of their operations, it is clear that the closure is having a huge impact on restaurant sales.
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